Today, the New York City Council Committee on Civil Service and Labor voted to pass bills Int. 888-18 and Int. 901-18, which respectively create a city-administered retirement savings program and a retirement savings board to oversee its administration. This legislation was significantly changed to include ERIC’s policy recommendations and will not impact our member companies’ operations in the city. The measures now go to the New York City Council as a whole, which will need to vote on the proposal again before it can be enacted.
When these bills were initially introduced in late 2018, ERIC highlighted several issues with their legislative construction early on, including eligibility requirements in conflict with ERISA and the lack of an exemption for existing employer-provided retirement plans. When the legislation was brought back up for consideration in late 2019, ERIC continued its advocacy effort by testifying in-person at the Committee’s public hearing where we explained the potentially disastrous conflicts with ERISA that any program must avoid.
In our testimony, ERIC emphasized the need for a program exemption for employers already offering tax-qualified retirement savings plans to their employees, as this would signify a direct overreach of city authority over federally governed ERISA plans. Additionally, our comments underlined the importance of following the standards and definitions established by ERISA to avoid conflicts with federal law; namely, we suggested that the proposed employee eligibility standards be amended to match ERISA’s minimum participant age and hours-worked requirements.
We are pleased that the Committee followed ERIC’s recommendations and made substantial changes to the bills’ text in response to our testimony and continued discussions. Notably, the legislation was amended to:
- Exempt employers who have offered a retirement plan in the preceding two years
- Increase the minimum age of employee participation from 18 to 21 years
- Increase eligibility standards to require an employee to be regularly scheduled for at least 20 hours of work per week
- Allow self-employed individuals to participate in the program
Furthermore, the bills now also include a contingency clause that would dismantle the proposed program if one of three situations arise:
- The State of New York establishes a retirement savings program that requires a substantial portion of otherwise covered employers to offer their employees a similar method of retirement contribution
- The New York City Corporation Counsel certifies that the proposed program is, or is likely to be, in conflict with or preempted by state or federal law – including ERISA
- The Comptroller and Director of Management and Budget certify that administration of the proposed program would create a risk of substantial additional cost to the city
ERIC applauds the favorable amendments to Int. 888-18 and Int. 901-18, as well as the recognition by the Committee as the authority of ERISA in this space. We will continue to work with city lawmakers to ensure that no burdens are placed on employers that already go above and beyond in offering retirement benefits.